Investor Presentation
30 June 2016
Disclaimer
Forward-looking statements
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regarding the group's financial position, business and acquisition strategy, plans and objectives of management for future operations are forward-looking
statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance
or achievements of the group, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such
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Such forward-looking statements are based on numerous assumptions regarding the group's present and future business strategies and the environment in which
the group will operate in the future. Many factors could cause the group's actual results, performance or achievements to differ materially from those in the forwardlooking statements. Forward-looking statements should, therefore, be construed in light of such risk factors and undue reliance should not be placed on forwardlooking statements. These forward-looking statements speak only as of the date of this presentation. The group expressly disclaims any obligations or undertaking,
except as required by applicable law and applicable regulations to release publicly any updates or revisions to any forward-looking statement contained herein to
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All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the
cautionary statements contained throughout this document.
The financial results presented in this presentation are preliminary and may change. This preliminary financial information includes calculations or figures that have
been prepared internally by management and have not been reviewed or audited by our independent chartered accounting firm. There can be no assurance that
the group’s actual results for the period presented herein will not differ from the preliminary financial data presented herein and such changes could be material.
This preliminary financial data should not be viewed as a substitute for full financial statements prepared in accordance with FRS 102 and is not necessarily
indicative of the results to be achieved for any future periods. This preliminary financial information, and previously reported amounts, could be impacted by the
effects of the pending review of the Board of Directors.
Use of non-FRS 102 financial information
This document contains references to certain non-FRS 102 financial measures. For definitions of terms such as “ebitdar”, “rent expense”, “ebitda”, “ebitda margin”,
”adjusted ebitda”, “adjusted ebitda margin”, “new site capital expenditures”, “maintenance capital expenditures”, “other capital expenditures”, “total capital
expenditures” and “like-for-like sales growth” and a detailed reconciliation between the non-FRS 102 financial results presented in this document and the
corresponding FRS 102 measures, please refer to appendix a. Certain financial and other information presented in this document has not been audited or
reviewed by our independent auditors.
Certain numerical, financial data, other amounts and percentages in this document may not sum due to rounding. In addition, certain figures in this document have
been rounded to the nearest whole number.
2
2
Original1 Investment | Highlights
 An attractive market
 A well established brand
 In a category of one
 Stable and resilient business model
 Well-invested restaurant portfolio
 Highly cash generative
 Experienced management, committed staff
1
At time of bond issue
4
Overview
1. Strong FY16 with further progress on all key metrics
I.
II.
III.
Traded ahead of the competition for over 2 years – 110 consecutive weeks1
FY16 adjusted EBITDA up by 28.0% to £38.7m, adjusted EBITDA margin % improving
Significantly deleveraged since bond issue, FY16 cash conversion continues at >100%
2. Active management of UK owned estate driving higher AUVs² through
I.
II.
Kaizen project through all new restaurants
Kaizen refurb of key existing restaurants
3. Further build iconic international restaurant brand through
I.
II.
Continued development of US owned estate, currently Boston and New York City
Focus on key European franchise markets, with new agreements now signed for France, Spain
and Italy
4. Executive team further strengthened and now complete
1 Performance
²
measured versus CGA Peach tracker to 26 June 2016
AUV is average unit volume as measured by sales
5
1.1 Strong key metrics | Ahead of competition for 110 consecutive weeks1
UK LFL² sales growth (%)
 Growth driven by covers and average
spend per head
 Strong performance inside and outside
London
 Delivery from 76 restaurants.
Delivering strong sales and cash profit
growth
FY163
FY153
Peach
Wagamama
16.2%
13.1%
12.7%
9.2%
13.1%
11.9%
11.3%
10.3%
9.8%
7.9%
4.0%
3.7%
2.3%
2.0%
Q1 2015
Q2 2015
Q3 2015
Q4 2015
3.0%
3.2%
FY 2015
Q1 2016
2.1%
2.4%
1.9%
2.5%
Q2 2016
Q3 2016
Q4 2016
FY 2016
UK LFL sales growth: percentage point difference ahead of peer group⁴
End Q4 2016
End Q4 2015
20.0%
18.0%
16.0%
14.0%
12.0%
10.0%
8.0%
6.0%
4.0%
2.0%
19-Jun
05-Jun
22-May
24-Apr
08-May
10-Apr
27-Mar
13-Mar
28-Feb
31-Jan
14-Feb
17-Jan
03-Jan
20-Dec
06-Dec
22-Nov
25-Oct
08-Nov
11-Oct
27-Sep
13-Sep
30-Aug
16-Aug
19-Jul
02-Aug
05-Jul
21-Jun
07-Jun
24-May
26-Apr
10-May
12-Apr
29-Mar
15-Mar
01-Mar
15-Feb
18-Jan
01-Feb
04-Jan
21-Dec
07-Dec
23-Nov
26-Oct
09-Nov
12-Oct
28-Sep
14-Sep
31-Aug
17-Aug
20-Jul
03-Aug
06-Jul
22-Jun
08-Jun
25-May
0.0%
1
to 26 June 2016
² Like for like sales growth defined as sales from our restaurants which traded for at least 17 full four
week periods
3 FY15 is 52 weeks to 26 April 2015 and FY16 is 52 weeks to 24 April 2016
4 wagamama actual LFL sales growth % versus peer group restaurants reported sales growth %
Source: Data from Coffer Peach business tracker (as of 26 June 2016) which monitors sales
performance across the following major restaurant operators: Pizza Hut, Pizza Express, TGI Fridays,
Casual Dining Group (Café Rouge, Bella Italia, Las Iguanas, La Tasca), Azzurri Restaurants (Zizzi,
ASK), Wagamama, YO! Sushi, Carluccio’s, Living Ventures, Strada, Gaucho, Giraffe, Byron, Gaucho
and Le Bistrot Pierre, Prezzo, The Restaurant Group (Chiquito, Frankie & Benny’s, Coast to Coast,
Garfunkel’s), M&B (Browns, Miller & Carter).
6
6
1.2 Strong key metrics | FY16 adjusted EBITDA up by 28.0% to £38.7m
margin % improving
Quarter 41
Full Year2
£54.7m
£191.7m
£228.1m
2016
£45.6m
Turnover3
2015
2016
2015
Change vs prior year
+12.0%
+20.0%
+18.0%
+19.0%
UK LFL Sales
+7.9%
+16.2%
+9.8%
+13.1%
LTM4 Adj EBITDA
£30.3m
£38.7m
Change vs prior year
+19.8%
+28.0%
LTM4 Adj EBITDA margin
15.8%
+17.0%
Change vs prior year
+20bps
+120bps
1
Quarter 4 is Q4 2016,12 weeks to 24 April 2016 and Q4 2015, 12 weeks to 26 April 2015
Year is FY16, 52 weeks to 24 April 2016 and FY15, 52 weeks to 26 April 2015
3 Turnover of company operated restaurants, excluding franchise revenue
4 Last 12 months
2 Full
7
1.3 Strong key metrics | Significantly de-leveraged
Cash conversion continues at >100%
Leverage5
At
issue
Q4
2015
Q1
2016
Q2
2016
Q3
2016
3.3x
3.1x
Q4
2016
4.5x
3.8x
3.7x
2.9x
Q4 20161
FY161
Underlying free cash flow2
£11.8m
£41.9m
Underlying cash conversion3
136.9%
108.4%
Net debt4
down to
£110.3m
1 Q4
2016 is 12 weeks to 24 April 2016 and FY16 is the 52 weeks to 24 April2016
adj. EBITDA less maintenance capex, +/- changes in net working capital (adjusted for £3.0m of one-off fees, principally re-financing)
3 underlying free cash flow / adj. EBITDA
4
net debt represents total debt less cash. At the time of re-financing, Q3 2015, net debt was £121.2m
5 leverage: net debt /LTM adj. EBITDA
2
8
8
2.1 UK estate | Kaizen project in new restaurants driving AUVs up
Bridgend opened Q4 2016
YOY % AUV change
£2.0
FY16
FY15
£1.8
FY14
£1.6
+5.5%
+12.5%
+8.2%
£1.4
£m AUV
£1.2
£1.0
£0.8
Heathrow T5, Rebuild Q1 2017 opening
£0.6
£0.4
£0.2
£0.0
FY14
FY15
FY16
9
9
2.2 UK estate | Growing number of Kaizen refurbs of existing sites driving AUVs up
By the end of FY17, the majority of the estate
will be new, rebuilt or refurb Kaizen
Bluewater – Mar ‘16
Liverpool – Feb ‘16
18
16
2.8
14
£m Capex
12
10
0.9
New sites
8
6
Refurb/Rebuild
10.2
Nth Greenwich – Feb ‘16
Manchester – Apr ‘16
Maintenance
7.7
4
2
2.4
2.4
FY15
FY16
0
10
3.1 Build iconic international restaurant brand | Continued development of the US
New York City
Boston




 Strong LFL trading in all Boston sites
 Focus on higher EBITDA sites
 Part “kaizen-ised”
Nomad Flatiron under construction
Infrastructure established
Open Fall 2016
2nd lease secured in East Village
Boston LFL1 sales growth (%)
FY16
25.3%
1.4%
0.8%
10.0%
13.7%
FY15
Q1 2016
Q2 2016
Q3 2016
11.3%
Q4 2016
FY16
1 Like for like sales growth defined as sales from our restaurants which traded for at
least 17 full four week periods
11
3.1 Build iconic international restaurant brand | European franchise markets
New agreements signed:
 France
 Spain
 Italy
Continued growth in existing markets
1
1 In addition to European markets we currently operate in New Zealand, Qatar, UAE, Bahrain
12
4. Executive team further strengthened and now complete
Board Members
Non-Executive Chair | Allan Leighton
 Rich multinational experience especially within multi-unit retail
 CEO of Asda and then, following its sale to Wal-Mart, President and CEO of Wal-Mart Europe.
 Plural career has included Directorships at: Dyson, Cannons Group, BHS, BSkyB Group, Selfridges; President of
Loblaw Companies, CEO of Pandora
 Has been Chairman of lastminute.com, Pace, Royal Mail. Currently Chairman of Entertainment One, Office,
Matalan, Canal River Trust , Co-operative Group
CEO | David Campbell
 AB, MBA, then early career at Pepsi in US, UK and Europe
 General management roles in various media businesses
 CEO of Virgin Radio, Ginger Media, Visit London and AEG Europe (The O2 and other properties)
 Former executive and board member of Formula One
COO | Jane Holbrook
 Also CFO
 Early career in corporate finance at Whitbread
 TDR operating partner - Pizza Express, ASK, Zizzi, also GBK
 CFO roles at Soho House/Caprice Holdings, Novus Leisure
 MBA, MSc and qualified accountant
Sector Heads
Geographical Heads
Global Brand Director | Simon Cope
 Started at Britvic in sales and marketing
 Moved to Mitchells & Butler in 2001; ultimately Group Marketing
Director across 1,600 outlets
 BA (Hons) Business Studies
Property Director | Stephen Boyce
 25 years multi-unit property experience
 Most recently Head of Property for Arcadia
 Head of Property for Sainsbury’s Convenience Division
 Property Director for Phones 4U; also at Game, Gap
People Director | Julia Rosamond
 2 years as HR Director, Travelodge
 17 years as HR Director, Nando’s
 3 years HRD Pelican group
 CIPD, Adv Dip (MSc) Mgt and Development Roffey Park
MD, UK | Sarah Hills
 Joined wagamama as a front of house manager
 Became Area Manager in 2006
 Began as Regional Director in January 2012
 MD, UK from start 2016 – just third operations leader in 24 years
MD, North America | Adam Gregory
 Based in New York
 Started with TGI Fridays, becoming Operations Manager
 Ran NEC Birmingham catering
 Site Director, Welcome Break
 Previously Regional Director 40 wagamama restaurants
 MD, North America from May 2016
MD, International | Brian Johnston
 Based in Munich
 Over 30 year property & franchising experiences in industry
 Started at Grand Met, Häagen-Dazs; 18 years at Burger King
 Joined from Rosinter in Moscow
13
Summary
1. Strong FY16 with further progress on all key metrics
I.
II.
III.
Traded ahead of the competition for over 2 years – 110 consecutive weeks1
FY16 adjusted EBITDA up by 28.0% to £38.7m, adjusted EBITDA margin % improving
Significantly deleveraged since bond issue, FY16 cash conversion continues at >100%
2. Active management of UK owned estate driving higher AUVs² through
I.
II.
Kaizen project through all new restaurants
Kaizen refurb of key existing restaurants
3. Further build iconic international restaurant brand through
I.
II.
Continued development of US owned estate, currently Boston and New York City
Focus on key European franchise markets, with new agreements now signed for France, Spain
and Italy
4. Executive team further strengthened and now complete
1 Performance
²
measured versus CGA Peach tracker to 26 June 2016
AUV is average unit volume as measured by sales
14
Appendix A
Q4 2015
Q4 2016
growth
FY15
FY16
growth
Group revenue
45.9
55.1
20.0%
193.3
229.9
18.9%
- UK
44.4
53.1
19.6%
186.6
222.0
19.0%
- USA 1
1.2
1.6
33.3%
5.2
6.2
19.2%
- franchise
0.3
0.4
33.3%
1.5
1.7
13.3%
7.9%
16.2%
-
9.8%
13.1%
-
(14.1%)
25.3%
-
1.4%
11.3%
7.5
8.6
14.7%
30.3
38.7
28.0%
% margin
16.5%
15.8%
(70bps)
15.8%
17.0%
120bps
% margin2
17.4%
16.0%
(140bps)
16.3%
17.5%
120bps
(£m)
UK lfl sales
US lfl sales 1
Adjusted EBITDA
-
1 includes
impact of fluctuations in exchange rates. US LFL sales are
shown on the basis of USD sales
2 excludes
incremental management incentive charges, reflecting
significant over-budget performance
16
Appendix B | Adjusted EBITDA reconciliation
Q4 20151
£m
EBIT
add back:
Q4 20162
(6.8)
depreciation and
amortisation
FY151
3.1
FY162
(0.1)
LTM3
16.7
16.7
4.2
4.2
18.0
17.9
18.0
-
0.5
1.1
2.7
2.7
exceptional costs
10.0
0.7
11.0
1.1
1.1
board fees
0.1
0.1
0.3
0.3
0.3
opening costs
adj. EBITDA
7.5
1 Q4
8.6
30.3
2015 is 12 weeks to 26 April 2015 and FY15 is the 52 weeks to 26 April 2015
2016 is 12 weeks to 24 April 2016 and FY16 is the 52 weeks to 24 April 2016
3 last twelve months
2 Q4
38.7
38.7
Appendix C | Free cash flow
Improvement in net debt driven by trading performance and includes £10.2m of new site capex spend
(£m)
as at 24 April 2016
(£m)
LTM3
adjusted
EBITDA
Net debt
Ratio
38.7
110.3
2.9x
Q4 2015
Q4 2016
FY15
FY16
7.5
8.6
30.3
38.7
(0.3)
(1.0)
(2.4)
(2.4)
change in net working
capital 1
2.7
4.2
4.9
5.6
free cash flow 2
9.9
11.8
32.4
41.9
free cash flow %
132.1%
136.9%
107.3%
108.4%
3.2
2.4
7.7
10.2
0.2
1.6
0.9
2.8
adjusted EBITDA
maintenance capex
new site capex
refurbishment capex
1 FY15
and FY15 both adjusted to reflect movement in one-off fees relating to the refinancing.
ebitda less maintenance capex, +/- changes in working capital adjusted per 1 above
3 last twelve months, see appendix A for reconciliation of EBIT to adjusted EBITDA
2 adjusted